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I want to create an Operating System installed upon a USB instead HDD (4 GB)

So I wanted to know if there were any special steps for it or simply choosing usb in installation menu. P.S - I want to do full install and not live boot.

And After that I want to encrypt the entire Operating System using TrueCypt , guide already present on their website , I just wanted to know if it would be compatible with this method.

THanks :)

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4GB is too small for a full install of Ubuntu. –  user68186 Oct 17 '13 at 16:15
4G is OK as of 13.04 if you leave out swap. Not sure of 13.10. –  ubfan1 Oct 17 '13 at 17:17

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